Live Cattle (April)
In yesterday’s report we talked about pressing the short side into today’s trade, looking for follow through pressure on the open, but April live cattle opened up steady(er than we thought). They eventually gave up ground into the afternoon session with the market making new lows for the move. Though we do think there is more downside potential in the near future, we did start reducing speculative shorts for some clients. In yesterday’s report we talked about two points to keep in mind through this week’s trade, 120.375 and 118.975. The first, represents the 200-day moving average. The second represents the more important, 50% retracement. Whether you are bullish or bearish, these are important points. If you’re bearish and have been short, these are potential exit points/areas. If you’re bullish, these are points to consider getting long exposure on. If you don’t know what you are, don’t trade, cash is a position. With all the technical damage that the chart has incurred over the last week, finding meaningful resistance becomes much more difficult.
Resistance: 124.55-125.10***, 127.90-128.55***
Support: 120.375**, 118.975****
Feeder Cattle (March)
March feeder cattle held well considering the finished limit down in the previous session. The market made new lows for the move but failed to squeeze more longs out of their positions. With that said, the market also failed to find a meaningful and sustainable bounce. First resistance tomorrow remains intact, we have listed that as a pivot pocket that comes in from 136.625-136.90, this pocket represents today’s highs and the 50% retracement from the contract lows in September to the recent “triple top highs”. First technical support comes in from 133.25-134.20, this pocket represents a gap from September 20th, as well as a key retracement. We would not be surprised to see the market find some moderate relief here with the RSI currently at 25.
Resistance: 138.80-139.25****, 140.80-141.125**
Support: 133.25-134.20****, 130.00
Lean Hogs (April)
We would like to start off by apologizing, in yesterday’s report we got sidetracked talking about the August seasonal which led us to list the August levels instead of April’s. For those of you that missed it, that seasonal is as follows: Buying August lean hogs on January 27th and liquidating on February 27th has been profitable for 13 of the last 15 years, the average gain being roughly $1.70 (not much considering the recent volatility). Now for the APRIL technicals: First technical resistance for tomorrow comes in from 72.325-73.075. This pocket represents previous support (January 21st) and the gap from the Monday open; this was tested and held today. The bulls MUST achieve consecutive closes above here to begin neutralizing the chart. A failure to do so would keep the door open for a retest of the August 5th lows, 68.45.
Resistance: 72.325-73.075****, 75.225-75.35**
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.